Why go public? weigh the pros and cons thoroughly before you make a decision. These are outlined below for your easy reference.

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1 Going public guide

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3 Introduction Following the launch of the Shenzhen Stock Exchange ChiNext Index in October 2009, China became the world s most outperformed initial public offering (IPO) market in Chinese enterprises have become a major source of IPOs in the global market, and the idea of going public is more popular than ever among them. In fact, going public is a major transitional milestone in the life of a company. However, doing so may bring many challenges, and it may require a company s complete restructuring. You will also have to meet regulatory authorities, media, sponsors, accountants, lawyers and many other parties that you may have never encountered before. Moreover, you will be required to submit a tremendous volume of documentation. Even then, a successful IPO is just the beginning. From then on, your company will be subject to a greater number of risks and challenges in an everchanging regulatory environment. It is therefore of utmost importance that you find an experienced partner who understands your business and legal requirements, and who offers you the most professional and personalised services, both before and after you go public. Established over 30 years ago, Grant Thornton China provides a full range of customised, efficient and cost-effective listing and audit services to businesses. We were one of the first leading accountants to qualify to undertake securities and futures-related audits in China, and to be approved by the Ministry of Finance to carry out audits for H-Share companies. To date, we have provided audit services to over 120 listed companies. This guide will give you a clear overview of the general IPO procedures and help you prepare your company to take this important step. 1

4 Why go public? The decision to go public is a momentous one. Although it has many potential benefits, you will also need to consider the disadvantages carefully as part of your planning process, so that you can weigh the pros and cons thoroughly before you make a decision. These are outlined below for your easy reference. Pros Additional capital Your company may be able to raise the capital it needs for its future development, strengthen its capital structure and risk resistance capacity, and enhance its growth momentum by going public. Diversified funding sources A public offering may increase your company s net worth and debt-to-equity ratio, which can strengthen its ability to secure loans or raise capital in the future. Support for future mergers and acquisitions The shares of a public company can be used as liquid capital to finance future acquisitions. This is an important consideration if your longterm strategy includes plans for diversification, geographical expansion or other strategic investments. Increased brand equity and visibility Going public can strengthen your company s reputation and recognition in the market. Ability to attract and retain quality personnel A listed company can attract and retain highcalibre personnel more easily by offering company shares and options as bonuses or incentives. Employees with an equity interest in the company are often more motivated and driven to maximise their interests. Stockholder liquidity Your company s shareholders may be able to liquidate a portion of their holdings in order to diversify their personal investments, while keeping the company on a sound financial footing. Personal prestige You can gain a great deal of personal prestige and a sense of self-fulfilment by being the leader of a listed company. Management Going public can help establish a modern system, standardise the corporate governance structure, enhance the management standard and lower the operational risks. 2

5 Cons Disclosure of information A public company s operations and financial results are open to public scrutiny. As a result, information about the company, its personnel, directors and certain shareholders that is rarely disclosed by private companies will become available to competitors, customers, employees and others. Information such as your company s sales and profits, competitive advantages and strategies, and the salaries and perquisites of your personnel must be disclosed, not only when you initially go public, but also periodically after the offering has been completed. Time and effort The process of going public will require a great deal of time and effort. You will need to meet frequently with underwriters, lawyers and accountants and spend many hours assembling financial and operating information about your company. You will also have to be actively involved in selling your company to the investment community. A typical IPO usually takes four to five months to complete, and it will consume much of your time and endeavours during that period. Possible loss of control You may lose control of your company if a sufficiently large percentage of its shares is sold to the public. Ownership dilution may also result from any subsequent equity offerings, pledges of shares or stock option exercises for the acquisition of other companies. Investor pressures You may come under considerable pressure to maintain your company s performance. Furthermore, because you will be reporting operating results semi-annually or quarterly, many investors, such as investment bankers and shareholders, will evaluate your company on this basis. Compliance requirements Your company will be monitored by more regulatory and supervising authorities, and abide by more laws, regulation and rules. 3

6 How do you go public? Going public is a complicated process. It is critically important to commission a competent and professional external team to lead your company through it, and this will increase your chance of success. Grant Thornton China will be pleased to help you every step of the way. GO PUBLIC Before listing helping you decide whether to go public appointment of an external team of experts company-wide reorganisation and reforms introduction of strategic investors. During listing due diligence and consultations preparation of offering documents submission of these documents for regulatory approval approval by the regulatory authority roadshows going public. After listing regular reporting post-listing legal compliance post-listing mergers and acquisitions refinancing and reorganisation. 4

7 Before listing Challenges you will encounter: a company that is going public must have a suitable organisational structure for public investment. Many private businesses are operated by a partnership or alliance of affiliated companies. A company that is going public should be operated as a share company or as a parent company with subsidiaries. Core businesses, assets and liabilities that are not attributable to the company going public should be separated from the listing structure opinions and assistance from experts and accountants will be needed during the submission of a significant amount of information preparations for a public offering present a good opportunity for a company to review its taxation arrangements once the structure of the company that is going public has been confirmed, its subsidiaries should perform an annual audit. If any relevant businesses have not previously been audited properly, this should be done before the offering so that compliance can be achieved. Services we offer: evaluation of the listing criteria and preparations of your company advice on any restructuring that is required strategic advice about the listing destination recommendations about potential investors services to optimise taxation arrangements advice on regulatory requirements and listing procedures submission of reviews and audited financial statements, and advice about internal control processes and any improvements that these may need. Decision to go public Appointment of an external team of experts Companywide reorganisation and reform Introduction of strategic investors 5

8 During the listing Challenges you will encounter: an IPO is an exacting process that involves: - preparation of a prospectus - submission of a listing application - responding to enquiries from the regulatory authority - distribution of the prospectus to the public the prospectus should thoroughly and faithfully disclose information about the company. It must include a description of its business and industry, its sales and marketing, and its products and production model, personnel and key members, financial information and associated risks intermediaries such as accountants, sponsors, lawyers and valuators should perform due diligence in their respective fields in order to ensure that the prospectus contains no omissions or errors the regulatory authority will ask questions about the draft prospectus and other information, and the company will need to amend the prospectus according to these enquiries and requests. Delay in doing so may hold up the entire approval process, and the company may miss the best timing or particular opportunities in a rapidly changing financial market as the result of unnecessary delays arising from unfamiliarity with the listing process. Services we offer: acting as reporting accountants assisting the sponsors with due diligence helping respond to the regulatory authority s enquiries assisting in the formation of an audit committee, and advising on ways to ensure a company s corporate governance complies with listing rules. Due diligence and consultations Preparation of application documents Submission for regulatory approval Approval by regulatory authority Roadshows Going public 6

9 After listing Challenges you will encounter: a public company is required to disclose details of its financial performance regularly following a successful IPO, a company should practice good corporate governance in order to comply with increasingly stringent and complex rules and requirements. Services we offer: acting as the primary auditor responsible for regular audits and reviews acting as a consultant on internal controls and corporate governance in order to provide advice about improvements advising on changes to accounting principles and regulatory requirements assistance in identifying merger and acquisition opportunities and the execution of such initiatives. Regular reporting Post-listing legal compliance Post-listing mergers and acquisitions Refi nancing and reorganisation 7

10 Choosing a listing destination Once you have decided to go ahead with an offering, you will have to choose the onshore or offshore market where it will be made. This is a critically important decision. It will usually depend on a number of factors, such as a company s size, industry, past performance and product market. The associated costs, revenue and risks also need to be considered. The following table compares the listing criteria of the most popular destinations among Chinese enterprises. Mainland China Main Board and Small and Medium Enterprise (SME) Board ChiNext Eligibility of listing entity A legally existing company limited by shares incorporated pursuant to law. A company limited by shares incorporated pursuant to law and with operational continuity for at least three years. Operating history Operational continuity for at least three years (operations may be deemed continuous if a limited liability company is converted into a company limited by shares by converting the original net book value of its assets into shares). Operational continuity for at least three years (operations may be deemed continuous if a limited liability company is converted into a company limited by shares by converting the original net book value of its assets into shares). 8

11 Hong Kong, China Main Board GEM Board a company limited by shares incorporated in Hong Kong, mainland China or any overseas countries or territories pursuant to law both the issuer and its business must, in the opinion of the Hong Kong Exchange, be suitable for listing. In general, cash entities are not accepted. A trading record of not less than three financial years. The Exchange may accept a shorter trading record period and waive or vary the revenue and other financial standard test requirements for: infrastructure project companies mineral companies exceptional circumstances in which the issuer group has a trading record of at least two years and the Exchange is satisfied that the listing of the issuer is desirable in the interests of the issuer and investor. See left-hand column. A trading record covering at least two years of active business pursuits. The Exchange may accept a shorter period of active business pursuits of less than two years in the following circumstances: the issuer has actively pursued its primary business for not less than 12 months the accountants report shows that the issuer had a turnover of not less than HK$500 million and total assets of not less than HK$500 million during the preceding 12 months (where intangible assets constitute a significant portion of total assets, the Exchange may exclude such intangible assets from total assets), or an estimated total market capitalisation of not less than HK$500 million. The Exchange may accept a shorter trading record period and waive or vary the revenue and other financial standard test requirement for: infrastructure project companies natural resources exploitation companies exceptional circumstances that are acceptable to the Exchange. 9

12 Mainland China Main Board and Small and Medium Enterprise (SME) Board ChiNext Revenue requirement positive net profit of at least RMB30 million in aggregate for the preceding three financial years. Net profit is determined before or after deducting non-current profit or loss (whichever is the lower) net cash flow generated from operating activities of at least RMB50 million in aggregate for the preceding three financial years, or operating revenue of at least RMB300 million in aggregate for the preceding three financial years no outstanding loss for the preceding period. recording profit for the preceding two years and net profit of at least RMB10 million in aggregate for the preceding two years with continuous growth; or recording profit for the preceding year, net profit of at least RMB5 million and operating revenue of at least RMB50 million for the preceding year with growth of at least 30% in the preceding two years (Note: the above requirements are optional. The issuer is only required to comply with any one of them. Net profit is determined before or after deducting non-current profit or loss, whichever is the lower.) no outstanding loss for the preceding period. Asset requirement Percentage of intangible assets (after land use rights, aquaculture rights and exploration and mining rights) to net assets of not more than 20% at the end of the last reporting period. Net assets of at least RMB20 million at the end of the last reporting period. Share capital requirement Total share capital of at least RMB30 million before the issuance. Total share capital of at least RMB30 million after the issuance. Primary business No material change in the preceding three years. One primary business and no material change in the preceding two years. Directors and management No material change in the preceding three years. No material change in the preceding two years. Actual controlling person(s) Competing businesses Connected transaction No material change in the preceding three years. The issuer s business shall not compete with the business of the controlling shareholder, actual controlling person or companies under his or her control. No unfair connected transaction exists and the price is fair. No profit manipulation through such a transaction exists. No material change in the preceding two years. The issuer s business shall not compete with the business of the controlling shareholder, actual controlling person or companies under his or her control. No connected transaction that has a material impact on the company s independence or unfair connected transaction exists. 10

13 Hong Kong, China Main Board GEM Board The issuer must pass one of the following three tests concerning financial statements: 1 Profit Test: profit attributable to shareholders generated in the ordinary and usual course of business of at least HK$50 million during the preceding three years (with a profit of at least HK$20 million for the preceding year, and aggregate profits of at least HK$30 million for the first two years) market capitalisation of at least HK$200 million at the time of listing. 2 Market Cap/ Revenue/ Cashflow Test: positive cashflow from operating activities of at least HK$100 million in aggregate for the three preceding years revenue of at least HK$500 million for the preceding year market capitalisation of at least HK$2 billion at the time of listing. 3 Market Cap/ Revenue Test: revenue of at least HK$500 million for the preceding year market capitalisation of at least HK$4 billion at the time of listing the Exchange may accept a shorter trading record period of three years if the issuer can demonstrate that: - its directors and management have sufficient and satisfactory experience of at least three years in the listing business and related industry - there has been management continuity for the most recent audited financial year. See the market capitalisation requirements for the three revenue projections above. No such requirement. Positive cashflow generated from operating activities of at least HK$20 million in aggregate for the two preceding years. Market capitalisation of at least HK$100 million at the time of listing. See the market capitalisation requirement above. public float of at least HK$50 million (at the time of listing) the minimum public float must represent at least 25% of the issuer s total issued share capital at the time of listing (the Exchange may accept a lower percentage of 15% to 25% if the issuer has a market capitalisation of over HK$10 billion at the time of listing) a minimum of 300 shareholders at the time of listing, but the number will depend on the size and nature of the issue. public float of at least HK$30 million (at the time of listing) the minimum public float must represent at least 25% of the issuer s total issued share capital at the time of listing (the Exchange may accept a lower percentage of 15% to 25% if the issuer has a market capitalisation of over HK$10 billion at the time of listing) the equity securities in the hands of the public should be held among at least 100 persons at the time of listing. The issuer is not required to be actively engaged in one primary business, but its core business should be suitable for listing in the opinion of the Exchange. In general, cash entities are not accepted. Management continuity for at least three financial years (upon fulfilment of the requirements of the third test, the Exchange may accept a shorter trading record period). Continuity of management and ownership for at least the most recent audited financial year. Controlling shareholders or directors are allowed to have an interest in a business that competes with the issuer s, provided full disclosure is made. The issuer must have actively pursued a primary business that is suitable for listing in the opinion of the Exchange for not less than 12 months. In general, cash entities are not accepted. Under substantially the same management and ownership during the period of active business pursuits. Continuity of management and ownership for at least the most recent audited financial year. Management, major shareholders or directors are allowed to have an interest in a business that competes with the issuer s, provided full disclosure is made. Full disclosure in conformity with the Listing Rules. Full disclosure in conformity with the Listing Rules. 11

14 Mainland China Growth potential and innovative ability Main Board and Small and Medium Enterprise (SME) Board No such requirement. ChiNext The issuer enjoys high growth potential, autonomy, innovative ability and competitive advantage in terms of technological, systematic and management innovation. Purpose of raising funds A clear purpose, and the funds will be used for the issuer s primary business. A clear purpose, and the funds will be used for the issuer s primary business. Future prospects Transfer of shareholders shares before the listing Sponsor The development plan for the year of offering and the following two years should be disclosed. Inclusion of profit forecasts is optional. The controlling shareholder(s) and effective controlling person(s) undertake not to transfer the shares they held in the issuer before the public listing within 36 months from the date of the listing. Other shareholders undertake not to transfer their shares within one year from the date of listing. A sponsor system should be implemented. The issuer should be sponsored and monitored by a sponsor on an ongoing basis. The issuer should provide plans for the following two years (excluding the year of offering) on a six-month basis. See left-hand column. A sponsor is required. The issuer should be monitored by a sponsor on an ongoing basis for three years after the listing. Accountants reporting requirements The financial and auditor s reports must be prepared in conformity with the PRC s Accounting Standards for Business Enterprises for three years or three years plus a period. The financial and auditor s reports must be prepared in conformity with the PRC s Accounting Standards for Business Enterprises for three years or three years plus a period. 12

15 If you decide to pursue an IPO in Hong Kong, you should note the following pre- and postlisting requirements: the technical transition between different accounting standards during the disclosure of financial reports and financial information compliance with the PRC s laws and regulations, as well as Hong Kong s relevant laws and regulations for listed companies, such as the Hong Kong Listing Rules and the Securities and Futures Ordinance (SFO) compliance with the PRC s accounting standards for business enterprises, and Hong Kong s regulatory and disclosure requirements, such as the Company Ordinance and Listing Rules financial statements and financial information should be prepared in both Chinese and English, and distributed to investors and shareholders in a timely manner. Hong Kong, China Main Board GEM Board No such requirement. A H-share applicant must fulfil the following requirements before lodging an application for listing on Hong Kong s GEM Board to the China Securities Regulatory Commission: it is a high-tech enterprise approved by the State s Ministry of Science and Technology it and its primary promoter conform to the State s rules and policies, and no material violation of such rules and policies has been observed in the preceding two years. Compliance with the State s industry policies, requirements on fixed asset investment, and requirements on the use of foreign funds. Compliance with the State s industry policies, requirements on fixed asset investment, and requirements on the use of foreign funds. The applicant must provide a general statement of future plans and prospects. Inclusion of profit forecasts is optional. controlling shareholder(s) of a new applicant must undertake (a) not to dispose of their interest in the issuer within the first six months after listing; (b) not to dispose of their interest in the issuer in the next six months in such a way that they would cease to be the controlling shareholders, i.e. at least a 30% interest in the issuer. The applicant must appoint at least one sponsor to assist in its IPO application. The applicant must provide a statement of business objectives for the remaining period of the financial year during which listing occurs, and the two full financial years thereafter. Inclusion of profit forecasts is optional. see left-hand column at the time of listing, significant shareholders must undertake not to dispose of their interest in the issuer within six months from the date of the listing documents. Same as the Hong Kong Main Board s requirements. A sponsor is any corporation or authorised financial institution that is licensed or registered under the SFO and permitted to offer financing opinions to any organisation. reports must be prepared in conformity with either Hong Kong Financial Reporting Standards or International Financial Reporting Standards. In the case of an issuer incorporated outside Hong Kong, the Exchange may accept financial reports in conformity with the Generally Accepted Accounting Principles of the United States of America (US GAAP) or other accounting standards in general, reports should cover at least three complete financial years immediately preceding the date of the prospectus the latest financial period reported must end less than six months before the date of the prospectus an accountants report with qualified or modified opinions in respect of issues that may have a material impact on investors may not be accepted. reports must be prepared in conformity with either Hong Kong Financial Reporting Standards or International Financial Reporting Standards reports may be prepared in accordance with the US GAAP if the applicant is or will be simultaneously listed on either the New York Stock Exchange or the NASDAQ Global Market in general, reports should cover at least the two complete financial years immediately preceding the publication of the listing documents the latest financial period reported in the accountants report must end less than six months before the date of the prospectus. 13

16 Comparison of major US securities markets New York Stock Exchange 1, 2 NASDAQ Global Market 1 Criteria Worldwide criteria Domestic criteria Income standard Equity standard Market value standard Total assets / total revenue standard Minimum number of investors 5,000, each holding 100 or more shares 400, each holding 100 or more shares 4 400, each holding 100 or more shares Minimum public 2.5 million shares million shares million shares float 3 Total market value of public shares US$100 million 12 - US$8 million US$18 million US$20 million US$20 million Minimum bid price N/A N/A US$4 US$4 US$4 10 US$4 Market maker 5 N/A N/A Operating history N/A N/A N/A 2 Years N/A N/A Market value of listed shares N/A N/A N/A N/A US$75 million 14 N/A Balance sheet N/A N/A US$15 million in shareholders equity US$30 million in shareholders equity N/A US$75 million of total assets and total revenue for the last financial year, or two of the last three financial years Pre-tax operating income US$100 million in aggregate for the last three financial years 6, 7 US$10 million in aggregate for the last three financial years 8, 9 US$1 million in aggregate for the last financial year, or two of the last three financial years N/A N/A N/A Corporate Yes Yes 13 governance 11 14

17 Comparison of Major US Securities Markets NASDAQ Global Select Market 1 NASDAQ Capital Market 1 Standard One Standard Two Standard Three Equity standard Market value of listed securities standard 10 Net income standard 450, each holding 100 or more shares, or 2, , each holding 100 or more shares 1.25 million shares 1 million shares 25 US$70 million 16 US$15 million US$15 million US$5 million US$ 4 20 US$ 4 3 or N/A 2 years N/A N/A N/A An average of US$550 million in the last 12 months 22 An average of US$850 million in the last 12 months 22 N/A US$50 million 14 N/A N/A US$4 million in shareholders equity US$4 million in shareholders equity US$4 million in shareholders equity At least US$11 million in aggregate for the last three 17, 23, 24 financial years N/A 18, 24 N/A 19 N/A N/A US$750,000 for the last financial year, or two of the last three financial years Yes 13 Yes 13 15

18 Notes: 1 Source: Listing Requirements and Fees, the NASDAQ Global Markets, as of August 2009 and Listing Company Manual as of 28 August New York Stock Exchange offers two sets of standard for non-us companies-world-wide or domestic-under which they may qualify for listing. 3 For NASDAQ markets, public fl oat is defi ned as total shares outstanding less 10% or more shares held directly or indirectly by any senior staff, directors or benefi cial owners. 4 Alternatively, non-us companies must meet either of: i. 2,200 total shareholders and 100,000 shares monthly trading volume (recent 6 months); or ii. 500 total shareholders and 1 million Shares monthly trading volume (recent 12 months). 5 An Electronic Communication Network is not considered a market maker for the purpose of these rules. 6 With no less than US$25 million (worldwide) in each of the two preceding fi nancial years. 7 Alternatively, non-us companies must meet the valuation with cash fl ow test or pure valuation test for valuation/revenue criteria: i. Valuation with cash fl ow test market capitalisation not less than US$500 million and revenues during the last 12 months of US$100 million; operating cash fl ow of US$100 million in aggregate for last three years with at least US$25 million in each of the two preceding years; or ii. Pure valuation test-market capitalisation of US$750 million and revenue of US$75 million for the most recent fi nancial year. 8 With no less than US$2 million in each of the two preceding fi nancial years and the fi gures must be positive for all three years. 9 Alternatively, non-us companies must meet the valuation with cash fl ow test or pure valuation test for valuation/revenue criteria: i. Valuation with cash fl ow test-market capitalisation of not less than US$500 million and revenues during the recent 12 months of US$100 million; operating cash fl ow of US$25 million in aggregate for the last three years and the fi gures must be positive for all three years; or ii. Pure valuation test-market capitalisation of US$750 million and revenue of US$75 million for the most recent fi nancial year. 10 Companies already listed on other markets qualifying only under the market value of listed securities requirement must meet the market value of listed securities and the bid price requirements for 90 consecutive trading days prior to the application. 11 Non-US companies going public on a US stock exchange are required to comply with the requirements of the 2002 Sarbanes-Oxley Act (the Act) during the fi rst fi nancial year ended 15 December 2007 or beyond. The Act has brought about signifi cant changes in corporate governance, accounting and the overall fi nancial markets. It has also brought about fundamental changes in how audit committees, management and auditors carry out their respective responsibilities and interact with each other. 12 Shares held by directors, senior offi cers or immediate families and other concentrated holdings of 10% or more are excluded in calculating the number of publicly held shares. 13 As required under Marketplace Rules Under Marketplace Rules 5005(a)(21), listed securities is defi ned as securities quoted on NASDAQ or listed on a national securities exchange. 15 Seasoned companies should either have 450 investors each holding 100 or more shares, or 2,200 investors, or 550 investors and average monthly trading volume of 1.1 million over the past 12 months. 16 Seasoned companies should have either a market value of US$110 million, or a market value of publicly held shares of US$100 million and US$110 million of shareholders equity. 17 With no less than US$2.2 million in each of the two recent fi nancial years and no less than US$0 for each of the preceding three fi nancial years. 18 Revenues for the previous fi nancial year should be at least US$110 million, and the aggregate cash fl ow from operating activities (excluding changes in operating capital) for the last three years should be at least US$27.5 million, with no less than US$0 for each of the preceding three fi nancial years. 19 Revenues for the previous fi nancial year should be at least US$90 million. 20 The bid price requirement is not applicable to a company listed on the NASDAQ Market that transfers its listing to the NASDAQ Global Market. 21 A company also satisfi es the requirements of Rule 5405(b)(1) or 5405(b)(2) is required to have 3 market makers. Otherwise, the company is required to have 4 market makers. 22 In the case of an issuer s IPO, compliance with the market capitalisation is determined at the time of listing. 23 If a company does not have three years of publicly reported fi nancial data, it may qualify under Rule 5315 (f)(3)(a) if it has: i. reported aggregate income from continuing operations before taxes of at least US$11 million; and ii. positive income from continuing operations before taxes in each of the reported fi nancial years. 24 In calculating income from continuing operations before taxes and cash fl ows, NASDAQ will rely on a company s annual fi nancial information in the most recent periodic report and/or registration statements as submitted to the us Securities and Exchange Commission. A period of less than three months shall not be considered as a fi nancial year even if it is reported as a sub period in the company s publicly reported fi nancial statements. 25 In case of American Depositary Receipt, at least 400,000 shares should be issued. 16

19 Why Grant Thornton China? Who we are We are the exclusive member firm of Grant Thornton International Ltd in China. Headquartered in Beijing, we have over 120 partners and 2,400 staff in 17 offices across mainland China and Hong Kong SAR. With our unique one firm, one China approach, our offices are strategically aligned and we re able to serve our clients seamlessly across China. Established in 1981, we offer a full range of services including assurance, tax, advisory, asset valuation and project cost management. With extensive knowledge, experience, and industry expertise, our partners and professional teams combine local knowledge with a global insight. We serve a broad base of clients including over 120 public companies, more than 2,000 stateowned enterprises (SOEs), private companies, and multinational companies (MNCs). Where we are Headquartered in Beijing, we also have offices in Changchun, Chengdu, Dalian, Fuzhou, Guangzhou, Harbin, Hong Kong SAR, Nanjing, Nanning, Qingdao, Shanghai, Shenzhen, Taiyuan, Wuhan, Xiamen and Xi an. We have a strong foothold in all major economic centres in mainland China and Hong Kong SAR and are continuing to build our national presence. How we work Operating as a national platform, we have abundant resources of highly qualified professionals based in major cities across mainland China and Hong Kong SAR, who work closely with their counterparts worldwide. Grant Thornton China has an International Business Centre (IBC) that provides a gateway to the global resources of Grant Thornton. IBCs are led by experts in international business who can easily access the wealth of experience and knowledge of other member firm partners around the world and leverage the global expertise to serve our clients across borders. Our qualification and listing experience Grant Thornton China was one of the first accountants to qualify to perform audits for securities and futures-related business and H-Shares. Currently, we are the principal auditor of over 120 listed companies. At the end of 2010, we became one of the first Mainland accounting firms to receive an H-Share licence and be authorised to provide audit services in accordance with China s auditing standards. In addition, we are registered with the Public Company Accounting Oversight Board (PCAOB) and can sign the reports of Chinese companies listed in the US. 17

20 Our services Assurance mainland China and Hong Kong annual statutory audit IFRS audit US GAAP audit IPO audit M&A audit revenue forecast review succession performance audit agreed upon procedures audit capital verification. Tax personal and corporate compliance tax services tax advisory and consulting tax legislation update analysis preferential status application transfer pricing analysis expatriate tax services tax due diligence and tax audit. Advisory business risk services (BRS) transaction advisory services (TAS) - transaction support - mergers and acquisitions due diligence and risk analysis - pre-listing / pre-ipo services - financial and operational assessments. Other services asset valuation project cost management outbound and inbound investment set up and advisory corporate registration and filing corporate registration health check bookkeeping and accounting payroll management account payable and bank account management training programmes on accounting. 18

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